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Investments (FNCE30001)

Undergraduate level 3Points: 12.5On Campus (Parkville)

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Overview

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This subject is an introduction to investment analysis, with emphasis on equity securities and fixed interest securities. The topics covered focus on issues fundamental to financial managers, money managers, risk managers, financial advisers and regulators. These topics include: fundamental ideas in asset pricing; modern portfolio theory and its applications; equilibrium theories of asset pricing; portfolio performance evaluation; empirical evidence on security returns; key issues in pricing fixed interest securities; the term structure of interest rates; techniques in fixed interest portfolio management and the pricing of floating rate notes and interest rate swaps.

Intended learning outcomes

On successful completion of this subject students should be able to:



  • Discuss core concepts in finance, including risk, return, risk premium and risk aversion;
  • Analyse the portfolio selection problem, with emphasis on the mean variance framework;
  • Develop techniques to evaluate the performance of money managers;
  • Critically evaluate theories of asset pricing and their applications in the pricing of securities;
  • Analyse issues in the pricing of fixed interest securities and the management of portfolios;
  • Critically evaluate theories of the term structure of interest rates;
  • Discuss issues in the pricing of derivative securities and their application in risk management.

Generic skills

  • High level of development: problem solving; application of theory to practice; interpretation and analysis; critical thinking

  • Moderate level of development: written communication; statistical reasoning; synthesis and evaluation of data and other information

  • Some level of development: oral communication; collaborative learning; team work

Last updated: 12 December 2024